IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 3 NO. 3 2017

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Sustainable Economic Development and Environmental Degradation: Evidence from Nigeria

Dr. Samuel O. Ominyi & John Abu

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Abstract

This study examined the trade-off between economic growth and environmental degradation in Nigeria. This is against the postulation of Simon Kuznets’ inverted-U hypothesis in 1955 that pollution and other environmental degradation first rises and then falls with increase in income per capita. The study adopted the Vector Auto Regressive (VAR) approach in addition to the granger causality test to estimate this relationship using time series data from 1986 to 2015. The findings of this study reveal that the Environmental Kuznets Curve (EKC) does not fit the Nigerian data and contradicts the inverted-U hypothesis. This implies that at low income levels, the environment improves while at high income levels, the environment worsens. The empirical results reveal that an increase in GDP per capita leads to a rise in CO2 per capita which denotes environmental degradation. Conversely, an increase in CO2 emissions does not contribute significantly to growth which is contradictory. The study concludes that there is no significant trade-off between economic growth and environmental degradation – as both variables do not meaningfully affect each other. The study recommends that unless a meaningful reconciliation is done between fostering economic growth and protecting the environment, the goal of sustainable development will continue to be impaired by the overlaps. Further studies are recommended on estimating the balance between sustained economic growth and environmental sustainability.

keywords:

Economic Growth, Environmental Degradation, Kuznets Inverted-U Hypothesis, Sustainable Development

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Cambridge, Massachusetts: MIT Press

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Sustainable Development: Economy and Environment. Paper presented at the 2nd
International Conference on National Capacity Building Strategy for Sustainable
Development and Poverty Alleviation. May 26 – 28, 2015. American University in the
Emirates, Dubai International Academic City, Dubai.UAE.

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and Statistics.

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Development in Nigeria: A Theoretical Approach. Researchjournali’s Journal of
Economics, Vol. 3, No. 6, pp. 1 – 13

Phimphanthavong, H. (2013). The Impacts of Economic Growth on Environmental
Conditions in Laos.International Journal of Business Management and Economic
Research, Vol. 4, No. 5, pp. 766 – 774

Stern, D. I. (2003). The Environmental Kuznets Curve.Rensselaer Polytechnic Institute, Troy.
International Society for Ecological Economics. Internet Encyclopaedia of Ecological
Economics

Wolde, E. T. (2015). Economic Growth and Environmental Degradation in Ethiopia: An
Environmental Kuznets Curve Analysis Approach. Journal of Economics and
International Finance, Vol. 7, No. 4, pp. 72 – 79

Yang, L., Yuan, S. & Sun, L. (2007). The Relationships between Economic Growth and
Environmental Pollution Based on Time Series Data: An Empirical Study of Zhejiang
Province.Journal of Cambridge Studies, Vol. 7, No. 1, pp. 33 – 42.

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